Steppe Gold Pushing Ahead with Phase 2 Expansion

Ulaanbaatar, May 17, 2021 - Steppe Gold Ltd. (TSX: STGO) ("Steppe Gold" or the "Company") is pleased to announce its financial results for the quarter ended March 31, 2021.

The full version of the Condensed Interim Consolidated Financial Statements and Management's Discussion & Analysis can be viewed on the Company's website at www.steppegold.com or under the Company's profile on SEDAR at www.sedar.com. Amounts are expressed in United States dollars unless otherwise noted.

Steppe Gold President and CEO, Mr Bataa Tumur-Ochir commented, "We are very pleased to report another strong quarter of mining and stacking at our ATO project and, most importantly, a zero accident safety record at the project.

We have now mined over 1.8m tonnes of ore with 1.4m tonnes stacked on the leach pad. With a new fixed crusher in place this summer, we are planning a record year for stacking in 2021. We paused production in the first quarter with prevailing cold weather conditions and we resumed leaching in early April with a successful gold pour in late April.

Headwinds from COVID 19 disruptions have impacted operations at ATO. Specifically, the bottlenecks in supply of critical reagents remain a cause for concern but we are optimistic that this issue will be resolved shortly.

With the ATO resource now at 2.45m oz Au Eq, and our feasibility study on track to be finalised this summer, we are now focused on Phase 2 preparations. Project lender discussions are advancing and we are optimistic that timely debt financing will allow us to continue uninterrupted with long lead item procurement and Phase 2 construction, already underway.

We have filed a prospectus to list our shares on the Mongolian Stock Exchange. We plan to list this summer with an accompanying small equity financing. We are very excited to list in our home market and allow more Mongolians to participate in the success of Steppe Gold."

First Quarter Highlights (all figures in US$000s unless stated)

• Revenue for the three months ended March 31, 2021 was $1,634 on sales of 945 gold ounces and 861 silver ounces with average realized prices per ounce of $1,938 and $26 respectively
• Operating income from mine operations, before depreciation and depletion, was $964
• As at March 31, 2021 cash, restricted cash and savings accounts amounted to $28,976; bank debt was $13,451
• During the three months ended March 31, 2021, 170,130 tonnes of ore was mined and 189,283 tonnes of ore was stacked on the leach pad with an average gold grade of 1.91 g/t and an average silver grade of 10.1g/t.
• The Company announced a resource update on February 24, 2021 for the ATO Gold Mine. This update shows a doubling of the resource to 2.45m oz Au Eq and now supports a planned production profile of approximately 150,000 gold equivalent ounces per year and an estimated ten-year plus mine life
• Work is well advanced on the Definitive Feasibility Study (DFS) for the Phase 2 expansion of the ATO Gold mine. Incorporating the recent resource update and detailed new metallurgical work, the DFS is due for release in summer 2021.

Operational and Financial Summary

Outlook

The Company has continued to mine and stack throughout the winter months at planned rates. It now has approximately 1.4mt of ore stacked on the leach pad with a further 400kt on the ROM pad.

The Company paused leaching and gold production in the first quarter of 2021 as cold weather made leaching conditions less favourable. This allowed for a full quarter of plant maintenance and the Company is seeing the benefits of this in current production. This cold weather disruption will be remedied for the 2021/22 winter season with the installation of a boiler plant to heat process water nearing completion. The Company also wanted to conserve key chemicals and reagents for the warmer months given the continuing COVID 19-related supply constraints. The Company resumed leaching and production in early April 2021 with a successful gold pour in late April.

The Company is targeting annual production in 2021 and 2022 of 50,000 oz and then a transition to the fresh rock ores in 2023. There has been a slow start to production in 2021 and the achievement of full year production forecasts are dependent on no further delays on procurement due to COVID 19. Reagent supplies are currently unpredictable and any further delays will reduce production forecasts for 2021.

With a new crusher scheduled to be operational in summer 2021, the Company believes that higher stacking rates in the second half of 2021 will mitigate some of the lost production time in the first half of 2021.

The Company continues stacking ore on cell 3 of the leach pad. Stacking of the first level of the leach pad will continue through this year. Completion of the boiler house, used to warm the barren solution, is planned for Summer 2021.

The Company continues discussions with Mongolian and international lenders on a multi-tranche project debt facility to finance the Phase 2 expansion. The definitive feasibility study remains on track for completion in summer 2021.

Steppe Gold Ltd.

Steppe Gold is Mongolia's premier precious metals company.

For Further information, please contact:

Bataa Tumur-Ochir, CEO and President

Shangri-La office, Suite 1201, Olympic street
19A, Sukhbaatar District 1,
Ulaanbaatar 14241, Mongolia
Tel: +976 7732 1914

Cautionary Note Regarding Forward-Looking Statements:

The above contains forward-looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward-looking statements. Factors that could cause such differences include: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry. Forward-looking statements in this release include, among other things, statements regarding the trading of the Common Shares and business, economic, and political conditions in Mongolia. Although we believe the expectations reflected in our forward-looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release

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